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It is time banks play fair: FBAA

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Australian Broker | 04 Nov 2015, 08:00 AM Agree 0
As the major banks report increased profits over the latest reporting season, the FBAA is taking a stand against “unreasonable” commission clawbacks
  • plucka007 | 04 Nov 2015, 08:51 AM Agree 0
    Exactly that... Had a deal 5 years ago with Westpac... Client decided to top up and restructure to purchase another home... Got clawback for a deal 5 years ago and 3 month later the client sold their first home and paid out their loan and got a full clawback... So essentially I worked 5 years for the client for nothing...

    And what's more funny is that 5 years ago the commissions were a little lower but if you get clawback today they calculate on today's commissions which is even more than what they paid upfront for the loan. Stupid Westpac.
  • GC | 04 Nov 2015, 08:52 AM Agree 0
    Why should brokers write to the FBAA. It's plainly obvious we all disagree with the absurd policy. We now control nearly 60% of where the loans are placed. I would have thought that would carry some weight.

    FBAA & MFAA should just get on with it and start working on having claw backs removed.
  • Joffa | 04 Nov 2015, 09:02 AM Agree 0
    This, to me, is by far the worst aspect of broking.
    There is simply no other industry like it, whereby your income is still at risk two years after you performed work in good faith. This is a long time coming, and I hope we get somewhere.
  • Bottom Line | 04 Nov 2015, 09:02 AM Agree 0
    Well done FBAA. The more the issue gets raised, the better.
    MFAA strangely silent on the issue... I now tell all clients how the banks have their cake & eat it too. Most are horrified.
  • Paul B | 04 Nov 2015, 09:12 AM Agree 0
    Couldn't agree more. I still don't think the MFAA , FBAA and aggregators as a whole are doing enough to protect brokers from clawbacks. It's absolutely absurd, yet the focus from regulators is still on how much we are paid in commissions? The industry is also looking for reasons why new people aren't attracted to mortgage brokering? HELLO?! Try explaining clawbacks to them!
  • James B | 04 Nov 2015, 09:12 AM Agree 0
    Clawbacks are a bitter pill. Why not appeal to second tiers in the first instance? It would take half a dozen lenders to support this strategy and reap the benefits of good PR and increased volumes. The majors could fall into line or lose market share.
  • Emra | 04 Nov 2015, 09:13 AM Agree 0
    What is the email address?
  • Mark | 04 Nov 2015, 09:20 AM Agree 0
    Thanks Peter I will be sending an email to you., GC I understand what you are saying but we need to be vocal about this issue and numbers are the only way to go about eliminating clawbacks. Peter where can I obtain your email address and to the MFAA what are you doing about this issue?
  • Rocky W | 04 Nov 2015, 09:23 AM Agree 0
    Totally agree with Peter... Fed up with having to try and convince clients that what they signed is enforceable by law when it comes to clawbacks. I've had Sydney clients this year that have sold their properties for unbelievable prices when 12 months ago they weren't even thinking of selling. And the only person who loses on the deal is me. I understand the education process but a client won't hand over money without a fight. And who has the time or the money to fight? This is the grubby side of the industry, and I'll support any group or body that will continue to challenge the banks on clawbacks. Here's an idea - the clawback statement on brokers should read... "will be clawed back in the first 18 months of a loan if that broker is involved in anyway with the refinance of the loan or the sale of the property". That I could live with.
  • Peter White CEO FBAA | 04 Nov 2015, 10:26 AM Agree 0
    If you want to email me in confidence my address is on our website or

    Strength in numbers is important with this - and thanks for the emails already!

    Regards, Peter.
  • Broker | 04 Nov 2015, 11:29 AM Agree 0
    I won't be holding my breath for any positive outcome here.

    I will not write loans that do not include a clawback policy in my finance brokers contract, as I need to be paid for what I do and also protect my income and cash flow - you know just like all self employed people should do!
  • Russell | 04 Nov 2015, 12:03 PM Agree 0
    The MFAA should also be fighting to get these clawbacks removed it is terrible, I do not know any other business where you do all the work then some greedy institution that makes billions of dollars in profits from you claw back all the work you have done up to 2 years after the work has been done.

    I don't see the loan officers of the bank getting clawed back from their pay when a customer leaves them why should we?
  • Papery | 04 Nov 2015, 12:13 PM Agree 0
    Most of us include a 'good faith' clawback provision within our credit quotes which the clients signs, so why can't the Lenders just allow a broker the opportunity to include the collection of that clawback at the time the debt is paid out upon presentation of the signed credit quote?

    We all know how hard it is to get a client to pay the funds over if they don't want to & then as previously mentioned, it isn't easy trying to enforce & collect the clawback otherwise.
  • Rocky W | 04 Nov 2015, 01:19 PM Agree 0
    Good thinking Papery. As it's an industry standard, all of the lenders are well aware of what's in our credit quotes. Yet they have no hesitation in just scrounging back our commission when a loan is paid out. If everyone is on the same level playing field, then the lenders should be held accountable to accept our signed credit quote and collect our lawful clawback from the client before it then makes it's clawback on us. If a client has the right to challenge the clawback from a broker, why then do brokers not have the same right to challenge a clawback from a lender?
  • Broker | 04 Nov 2015, 09:38 PM Agree 0
    I'm sure the big 4 answer to this issue would be to abolish commissions altogether - problem solved they would say!
  • Deepika Weerakoon | 05 Nov 2015, 11:37 AM Agree 0
    The principle of blanket clawback is fundamentally wrong, this is not only bullish behaviour but also lacks integrity in the relationship and undermines the broker who works hard to bring the deal to them. Good on FBAA for speaking up!
  • Cop out | 05 Nov 2015, 09:08 PM Agree 0
    Nothing more than a defacto deferred establishment fee passed on to the broker.

    I tell my accountant, how would he feel if he did my tax return, charged me $5K and next year I went to a new accountant because he dangled a $1K rebate, and he copped a bill to pay back the $5K. You're kidding!

    At least Ned Kelly had armour!
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